Indian share markets traded on a negative note throughout the day and recovered during the closing hours to end the day marginally lower. Sectoral indices ended on a mixed note with stocks in the capital goods sector and auto sector witnessing buying interest while telecom stocks and metal stocks witnessed selling pressure.

At the closing bell, the BSE Sensex stood lower by 53 points (down 0.1%) and the NSE Nifty closed down by 16 points (down 0.1%). The BSE Mid Cap index and the BSE Small Cap index ended the day on a flat note.

Speaking of the broader share markets, how has the Sensex performed compared to BSE-Midcap and BSE Smallcap during downturns?

Here's how this data looks like when plotted on a chart...

Large-Cap Index Outperformed in the Downturn

Clearly, in the face of such volatility, you need a balance of growth and safety.

The rupee was trading at 70.05 against the US$.

Asian stock markets finished on a negative note. As of the most recent closing prices, the Hang Seng was down by 0.9% and the Shanghai Composite was down by 0.5%. The Nikkei 225 was down 2.8%.

In the news from the finance sector, shares of financial companies including banks, non-banking financial companies (NBFC), housing finance companies (HFCs) and microfinance institutions were in focus today on the back of the Reserve Bank of India's (RBI) announcement to scale up liquidity infusion via purchase of government bonds.

Note that on Tuesday, the RBI announced bond buyback programme for the current year on expectations to raise bond prices and boost bank treasury profits when lenders need capital.

The RBI yesterday also announced that it will be purchasing Rs 500 billion of bonds in January in its open market operation (OMO).

The central bank has further earmarked an additional Rs 100 billion in OMO for December.

This is to intensify cash injection into the banking system starved of cash.

The RBI had earlier stated that the system liquidity will move into deficit in the second half of FY19 and the evolving liquidity conditions would determine its choice of instruments for both transient and durable liquidity management.

OMOs is one of the tools which can be used to either inject or drain liquidity from the system.

It is employed to adjust rupee liquidity conditions in the market on a durable basis.

The OMO by the RBI will help in easing the cash shortage in the system and stabilize debt market rates.

It will also help ease tight liquidity situation triggered by a series of default by group companies of IL&FS.

What effect the above measure will have on the banking system remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

Moving on to the news from the commodity space, oil prices fell about 3%, heading back towards their lowest levels for more than a year on worries about oversupply and the outlook for energy demand as stock markets tumbled following a US interest rate rise.

Stock markets dropped worldwide after the US Federal Reserve raised rates and kept most of its guidance for additional hikes over the next two years, dashing investor hopes for a more dovish policy outlook.

In an attempt to boost prices, the Organization of the Petroleum Exporting Countries (OPEC) and other oil producers including Russia agreed to curb output by 1.2 million barrels per day (bpd).

Oil prices have been pulled down sharply since October by signs of an economic slowdown. Meanwhile, the two world's biggest economies, the United States and China, are locked in a trade war which is threatening to slow global growth and battering investor sentiment.

It would be interesting to see how this pans out. Meanwhile, we will keep you updated on all the developments from this space.